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Budget Checkups
Sticking With Your Budget - Monthly Checkups
Personal budgets can be even more unrealistic than government budgets, and that's saying a lot. If you've reviewed your monthly cash flow and created a budget that is realistic, you are way ahead of the game. However, most budgets are off the first few times around for the following reasons:
Certain expenses were not factored in. Maybe you forgot to include your property taxes, which are paid every three months.
You aren't used to living on a budget. Living below your means is harder than most people realize, and it takes a while to strengthen your discipline enough to stick with it.
Your budget is a pipe dream. Sure, you can eat Ramen everyday and wash yourself and your car at the same time, but do you really want to? Take an honest look at your budget, and if it's too low, make adjustments accordingly.
The rainy day happened. Perhaps your car broke down, or there was an unexpected medical bill when you or your kids got sick. These happen to all of us, and should be included in your budget.
Prices rose. If the price of gas doubled, this could play havoc with your budget, especially if you have a long commute. Likewise, energy costs or groceries can rise dramatically and are beyond your control.
You didn't get paid. Either you got laid off, took a pay cut, or didn't receive payment for services rendered, a sudden decrease in income can be devastating to your budget.
Regardless of why your budget is failing, you need to attempt to balance it better than a politician. If your expenses have increased in one area (such as the cost of gas), try to decrease it from another area (eat at home more often). In order to make your budget work, you have to actually live on the amount it prescribes.
If your expenses are lower than anticipated, keep your budget at its current level for two months. If, after three months, those expenses are still lower than expected, shift the surplus towards your high interest debt first, and eventually invest in your savings and retirement accounts.
Budgets are like setting a workout plan. If you don't exercise it, you won't see any results. Be realistic about your budget goals and stay to the course. In due time, your debts will be paid off and you will be able to invest for the future. |
